By UnderwriteMe Marketing Team As Income Protection Action Week approaches its fourth year with the aim of giving advisers education about the positioning and value of Income Protection (IP), we thought it was worth highlighting the importance of the product and how it’s evolved. IP can be a vital financial safety net that can be used when an individual is unable to work due to an accident, injury or illness, yet recent research has highlighted some worrying statistics. 7 in 10 workers do not have IP and only 2 in 10 homeowners who pay a monthly mortgage have an IP policy. Many of us would face financial difficulties if we couldn’t work for a significant period of time. Here’s a short case study to highlight the difference and impact on life with or without Income Protection: Nigel is 29 and owns his own home. He works in IT and earns £50,000 per year. Nigel suffers a serious back injury, which results in him not being able to work for 9 months until surgery. It’s expected his recovery will take 2 years post-surgery. Without an IP policy, Nigel gets full sick pay from work for 1 month. When his sick pay finishes, he’s entitled to £116.75 per week Statutory Sick Pay for up to 28 weeks. Unfortunately, this nowhere near covers Nigel’s expenses and he’s forced to take out loans, before selling his home and moving back in with his parents, all of which causes significant stress and depression. With an IP policy, Nigel gets sick pay from his employer for the first month. After that, his IP provider pays out 65% of his salary, which equates to £2708 per month. This enables Nigel to pay all his bills and expenses. This allows him to complete his surgery and recovery without any added financial pressure and can return to work when he’s fit and ready to do so. The above case highlights just how important Income Protection is and it’s encouraging to see that more people and advisers are starting to recognise that it’s an important part of financial planning and that it plays a significant role in protecting an individual or family against an unforeseen circumstance. Income Protection Week 10 AUTUMN PROTECT NEWSLETT10
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